CMP475 Balancing Services Use of System (BSUoS) urgency decision

What changed

Ofgem has granted urgency status to CUSC Modification Proposal CMP475, raised by NESO on 15 April 2026. The modification would allow NESO to reopen fixed BSUoS tariff periods mid-period when its Working Cash Flow (WCF) is forecast to breach the threshold, and to recover that cash flow position back toward neutral within the same period. The CUSC Panel unanimously supported urgency on 21 April; Ofgem accepted on 29 April. The urgency designation compresses the normal modification timeline, limiting the window for industry consultation.

This is a structural change to how BSUoS works. Since CMP361 took effect in April 2023, BSUoS has been set as a fixed tariff over defined periods, giving suppliers and large demand users a known cost for each period. CMP475 introduces a reopener mechanism that makes those fixed periods conditional: fixed unless NESO's cash flow says otherwise. The charge remains notionally fixed, but NESO now holds a unilateral trigger to reset it.

What this means in practice

Demand users pay. BSUoS is levied on final demand. Suppliers pass it through to consumers. Under the current fixed tariff regime, suppliers can price BSUoS into their hedged positions with reasonable confidence. A mid-period reset breaks that hedge. The cost of the reset falls on suppliers who have already committed to customer prices, and ultimately on consumers who have no visibility of the mechanism at all.

Generators on BSUoS exemption are unaffected. Since CMP361, generation is exempt from BSUoS on a final-demand basis. CMP475 does not change this. The entire adjustment falls on the demand side.

NESO's cash flow risk is transferred, not eliminated. The modification does not reduce the underlying balancing costs that drive WCF pressure. It transfers the timing risk from NESO's balance sheet to demand users' bills. When balancing costs spike mid-period, instead of NESO absorbing the cash flow mismatch until the next tariff period (and recovering it then), it can reset tariffs immediately. This is a liquidity management tool for NESO, funded by demand.

The "fixed" in fixed BSUoS now carries an asterisk. CMP361's core promise was cost certainty. The policy rationale was explicit: suppliers and consumers should be able to plan around a known BSUoS charge for each defined period. CMP475 preserves the language of fixed tariffs while introducing a mechanism that can override them. The question is whether "fixed unless we reopen it" is meaningfully different from "variable with advance notice." For any supplier trying to hedge forward costs, the distinction is thin.

Urgency compresses scrutiny. The normal CUSC modification process allows for workgroup assessment, industry consultation, and alternative proposals. Urgency status shortens this timeline significantly. NESO raised the modification on 15 April; the Panel backed urgency six days later; Ofgem accepted eight days after that. The 14-day window from proposal to Panel recommendation is unusually fast for a change that alters the charging basis for all demand users. Industry participants will have limited opportunity to propose alternatives or challenge the WCF threshold calibration.

The WCF threshold itself matters, and it is not public. The trigger for a tariff reset is NESO forecasting that WCF will breach the threshold. The calibration of that threshold, the forecasting methodology, and the tolerance bands all determine how frequently this mechanism fires. A tight threshold with conservative forecasting could trigger resets regularly, making BSUoS effectively variable again. A generous threshold might never trigger. The detail is in the modification proposal, not the urgency decision, but the urgency route means that detail gets less industry scrutiny than it would under normal timelines.

What happens next

CMP475 now proceeds through the urgent modification process. This means a compressed workgroup phase, a shorter consultation window, and an accelerated Panel recommendation to Ofgem for a final decision. Under urgency procedures, the entire process from raising to decision can complete in weeks rather than the months typical of standard CUSC modifications.

Key dates to watch:

- Workgroup meetings will be scheduled imminently, likely within the first two weeks of May 2026. - Industry consultation will be shorter than the standard 15 working days. Participants should prepare responses early; the window may be as short as 5-10 working days. - CUSC Panel recommendation to Ofgem will follow the consultation, potentially by late May or early June. - Ofgem final decision could land before the end of June 2026, depending on whether alternative proposals emerge.

If approved, the reopener mechanism would apply to future BSUoS tariff periods. The implementation date will depend on the final decision, but the urgency designation signals NESO believes the WCF pressure is near-term, not hypothetical.

Related context: this modification should be read alongside CMP361 (the original fixed BSUoS reform) and any ongoing Ofgem work on BSUoS charging methodology. If mid-period resets become routine, the case for revisiting the fixed tariff model entirely becomes harder to avoid.